Less than a year after an initial proposal for annexation was presented to the town of Pagosa Springs, the Levine family and the Fairway Land Trust has pulled that request. Citing the national economic slowdown, incompatibility with town planning requirements and improved circumstances with the county (specifically regarding the adoption of the Urban Services Area), the Levines stated, in a letter to town council dated March 16, that, “Unfortunately, at this time we must withdraw our request for consideration of the Annexation Petition and Development Agreement by the Town Council.”

First proposed last September, annexation of the Levine property (also known as the Reservoir River Ranch) would have encompassed a 447-acre parcel of land just south of Reservoir Hill, bounded by Light Plant Road on the south, U.S. 84 on the east, and the San Juan River to the west. The conceptual plan, several years in the making, proposed 720 multi-family units on 120 acres, 344 single-family and multi-family units on 170 acres, and 448 mixed-use units (i.e. including commercial) on 28 acres. The remaining 227 acres on the property — 41 percent of the total acreage — would have been dedicated to open space, with about 25 acres of that open space possibly donated to the town for the purpose of adding to the Riverwalk and the proposed Mill Creek trail system.

In the letter, the Levines thanked council, staff and the planning commission, “(F) or its collective efforts and review Reservoir River Ranch concept plan, Annexation Petition, and Development Agreement over the past year,” but stated that “(I)t appears that there are obstacles to development with the Town of Pagosa Springs that are insurmountable.”

The first issue outlined in the letter referred to the maintenance of Light Plant Road. With the road included in the annexation, the town would have assumed the expense of maintaining the road from the county. Looking to offset that expense, the town asked for development benchmarks as a condition of the agreement. “The town was pushing for quick development,” said project lead Nancy Lauro of Russell Engineering, “To cover maintenance costs for the road — that just was not going to happen.”

Despite a Commerce Department report released Tuesday that indicated a 22 percent increase in new-housing starts, the letter cited the current national economic climate as another reason for pulling their request. “(W)e planned to initiate development as markets and circumstances warrant,” the letter went on to say, “The unparalled (sic) changes to the economy dictate that we cannot agree to the imposition of an aggressive and mandatory development schedule for the property as requested by the town.”

Third in the litany of reasons for cancelling the request, the letter stated, “From the inception, this project has been an awkward match with the existing Town development process. Simply put, the present Town code does not contain a process that allows for a master planned community.”

“The town was great, especially the staff,” said Lauro, “in trying to make it fit. It was more that they were overwhelmed with the development and a plat requirement with very little meaning. It’s nobody’s fault. It just wasn’t a good fit. The town was unused to a development like this at a conceptual level.”

“I disagree,” said Mark Weiler, one of the two council members (along with Stan Holt) involved in negotiations over the annexation and development agreement. “The town is absolutely prepared to handle a large development.”

In spite of the rationale given in the first three issues listed in the letter, the final issue provides clearest explanation for withdrawing the annexation request. “The County is now prepared to consider and review appropriate development on the urbanizing fringe,” the letter says and continues, “This changed situation is especially appropriate for our property which, although poised well for urban development, is not ready to initiate construction.”

Elaborating on the letter, Lauro said, “The Urban Services Area is a better fit. The Levines prefer to keep the property agricultural while waiting for development, making the county better suited to work with.”

With no equivocation, the letter makes clear its intent, saying, “While we are withdrawing further processing with the town, we are planning on meeting with county officials and staff as we analyze the proper development path for the ranch.”

Holt was not surprised to hear that the Levines would pursue an agreement with the county, saying, “They were playing both of us against each other. More power to them if they can get what they want from the county.”

Previous negotiations between the town and the Fairway Land Trust, arguably contentious at times over issues of open space and vested rights, nonetheless appeared to have been resolved.

“There was some issue with a small portion along the river,” Holt said, “But I didn’t consider it a show-stopper.”

However, as made clear in the Levine letter, performance benchmarks set forth by council for vested rights were ultimately unacceptable to the development’s vision.

“I thought we were in agreement with over ninety-percent of it (the annexation agreement),” said Holt, “It’s a little surprising they pulled out.”

“There were a couple of issues that the town and the applicant had not come to full agreement on,” said town manager David Mitchem, “That obviously could not be resolved. The withdrawal is unfortunate because the town was excited to have the development within the town. We believed the development really added value to the community.”

Cancellation of the annexation creates a large hole in the Pagosa Springs map, with the Blue Sky Village (annexed last December) and Blue Sky Ranch (pending) annexations just east of the Levine Property on U.S. 84 and the Putnam annexation to the west. Although the Levine letter suggests the possibility of future development and annexation projects with the town, the map gap now appears to reside within the domain of the county.

Mitchem, however, remains hopeful that the Levines will return to the table, saying, “Should the applicant reconsider their decision, the town would be pleased to continue our dialogue with them. The door is wide open.”

And, according to the Levines, they “... still have a desire to provide the community with an overall development plan that will ensure a coordinated future development with both the Town and County Comprehensive Plans. We continue to believe that our proposal is positive for the community and eliminates the potential for haphazard/piecemeal development, ensures implementation of the Town’s and County’s existing trails plan, provides substantial open space for public and conservation uses, and includes an access plan with consolidated points of access.”